When stock markets fall more than 20% we call it a “Bear Market”. Personally, our first bear market experience was Black Monday, October 19, 1987. The Dow dropped 22.6%, the largest single-day percentage drop in history, driving the Dow below 2,000.
We are currently experiencing our fifth bear market. In mid-February the Dow approached 30,000 and then rapidly fell below 20,000.
Now let’s think about this. In 1987 the Dow fell below 2,000, and recently the Dow fell below 20,000. So, in just over three decades the Dow had grown by ten times, from 2,000 to 20,000. Ten Times! Despite five bear markets!
This bear market is different for us because technology is allowing Patty and I to regularly participate in live, interactive webinars with our money managers. It’s been a fascinating ringside seat, watching them navigate their way through this tough period. It’s reassuring to listen to their thoughts and strategies as they reposition their portfolios for the recovery.
Otherwise, this bear market is the same as all bear markets, it’s driven by fear.
COVID-19 is serious, many people are suffering, fear is widespread, and fear itself is a form of suffering. We all need to practice self-awareness and self-care.
This too shall pass. The sun will shine again. We still believe long-term investing is the best strategy.
This memo was prepared solely by Terry and Patty Rempel who are registered representatives of FundEX (a member of the Mutual Funds Dealers Association of Canada and the MFDA Investor Protection Corporation). The views and opinions, including any recommendations, expressed in this memo are those of Terry and Patty Rempel. Bluestone Financial is a personal trade name of Terry and Patty Rempel.
